The Croghan Colonial Bank RSSD# 362717
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PUBLIC DISCLOSURE July 11, 2016 COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION The Croghan Colonial Bank RSSD# 362717 323 Croghan Street Fremont, Ohio 43420 Federal Reserve Bank of Cleveland P.O. Box 6387 Cleveland, OH 44101-1387 NOTE: This document is an evaluation of this institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operation of the institution. This evaluation is not, nor should it be construed as, an assessment of the financial condition of this institution. The rating assigned to this institution does not represent an analysis, conclusion or opinion of the federal financial supervisory agency concerning the safety and soundness of this financial institution. The Croghan Colonial Bank CRA Public Evaluation Fremont, Ohio July 11, 2016 TABLE OF CONTENTS Institution’s CRA Rating .................................................................................................................1 Scope of Examination ......................................................................................................................2 Description of Institution .................................................................................................................4 Description of Assessment Area ......................................................................................................6 Conclusions with Respect to Performance Tests .............................................................................8 Non-Metropolitan Ohio (full-scope review) a. Description of Institution’s Operations ................................................................................11 b. Conclusions with Respect to Performance Tests .................................................................19 Toledo Metropolitan Statistical Area (full-scope review) a. Description of Institution’s Operations ................................................................................30 b. Conclusions with Respect to Performance Tests .................................................................38 Appendix A: Assessment Area Maps ...........................................................................................43 Appendix B: Lending Tables ........................................................................................................45 Appendix C: Glossary of Terms ...................................................................................................51 Table of Contents The Croghan Colonial Bank CRA Public Evaluation Fremont, Ohio July 11, 2016 INSTITUTION'S CRA RATING: This institution is rated Satisfactory The Lending Test is rated: Satisfactory The Community Development Test is rated: Satisfactory The major factors and criteria contribution to this rating include: • The loan-to-deposit ratio is reasonable given the institution’s size, financial condition, and assessment area credit needs; • A substantial majority of loans and other lending-related activities are in the assessment area; • The geographic distribution of loans reflects a reasonable dispersion throughout the assessment areas; • The distribution of loans to borrowers reflects a reasonable penetration among individuals of different income levels (including low- and moderate-income); • The distribution of loans to businesses reflects a reasonable penetration among businesses of different revenue sizes given the demographics of the assessment areas; • There were no CRA-related complaints filed against the bank since the previous CRA examination; and • The community development performance demonstrates an adequate level of responsiveness to the community development needs of its assessment areas considering the bank’s capacity and the need and availability of such opportunities for community development in the bank’s assessment areas. The previous CRA examination conducted June 17, 2013 resulted in a “Satisfactory” performance rating. 1 The Croghan Colonial Bank CRA Public Evaluation Fremont, Ohio July 11, 2016 SCOPE OF EXAMINATION The Croghan Colonial Bank (Croghan) Community Reinvestment Act (CRA) performance was evaluated using the standards for intermediate small bank procedures under Regulation BB. Croghan’s CRA performance was evaluated based on lending data for the period of January 1, 2014 to December 31, 2015. The loan products evaluated include small business, consumer, and HMDA lending. HMDA loans are comprised of home purchase, refinance, home improvement, and multi-family. For the Non-metropolitan Ohio assessment area, HMDA loans included home purchase, refinance, and home improvement. Consumer loans included home equity and motor vehicle loans. Small business loans were also evaluated. For the Toledo assessment area review, HMDA loans were combined due to the lack of volume of each individual loan type. Consumer loans included motor vehicle loans exclusively due to the limited number of other consumer loans. There were an insufficient number of small business loans to analyze during the review period. The following table and charts illustrate the volume and distribution of loans originated during the evaluation period. Dollar Amount of Loans Loan Type Number of Loans (000s) HMDA 652 76,547 Consumer 1818 41,751 Small Business 395 60,039 Total 2,865 178,337 Originated Loans (#) Originated Loans ($) HMDA Consumer Small Business HMDA Consumer Small Business 14.0% 23.0% 34.0% 43.0% 63.0% 23.0% 2 The Croghan Colonial Bank CRA Public Evaluation Fremont, Ohio July 11, 2016 Based on the total loan volume by dollar amount and the composition of the loan portfolio, HMDA received the most weight, followed by consumer and small business lending. Croghan has two assessment areas throughout Ohio, including: • Non-metropolitan Ohio (Non-MSA Ohio), which includes the entireties of Ottawa, Sandusky, Seneca, Huron, and Erie Counties. • Toledo, OH MSA (Toledo MSA), which includes the entireties of Lucas and Wood Counties. Three census tracts of Henry County are included in this assessment area. Croghan’s assessment area in Non-MSA Ohio was given the greatest weight in this evaluation, as it contained the largest percentage of branches and originated the largest amount of loans (by number and amount). Croghan’s main office is located in Fremont, Ohio and 16 of Croghan’s 17 offices (94.1%) are located within this assessment area. The size and financial condition of the institution, lending opportunities in the assessment area, and competition with other financial institutions were also considered in the bank’s performance context. Two new community contacts were conducted and two recently completed community contacts were reviewed to provide context to the demographic and economic characteristics of the assessment areas in which the bank operates. Both assessment areas received a full-scope review. For the purpose of this evaluation, geographic and borrower distribution were weighted equally, since the assessment areas include a significant number of low-and moderate-income census tracts and low- to moderate-income households and families. In some cases, information for originated loans could not be provided by the bank. Therefore, the loan volumes used for borrower distribution are based on a sample of originated loans and are lower than the number of originated loans listed above. 3 The Croghan Colonial Bank CRA Public Evaluation Fremont, Ohio July 11, 2016 DESCRIPTION OF INSTITUTION The Croghan Colonial Bank is a full-service banking institution and is the sole banking subsidiary and the primary holding company asset of Croghan Bancshares, Inc., also located in Fremont, Ohio. As of March 31, 2016, Croghan reported $792 million in total assets, which is significantly higher than the previous examination date with total assets of approximately $630 million. This increase in assets of 27.5% is attributed to the acquisition of National Bank of Ohio (NBO) in December 2013. Croghan is a full service retail bank offering deposit accounts; residential mortgages; consumer, commercial, and small business loans; and home equity lines of credit. The bank serves its total assessment area through 17 branch offices and a loan production office (LPO). The majority of Croghan’s branches are located in Non-MSA Ohio (16 offices). The main office and four branches are located in Fremont in Sandusky County. Two offices are located in Clyde and Green Springs in Sandusky County. Three of the new branches resulting from the 2013 acquisition are located in Oak Harbor, Curtice, and Port Clinton in Ottawa County. An existing office in Port Clinton was closed, while an additional office was opened in downtown Port Clinton in 2015. In Seneca County, there are two branches located in Tiffin and in Huron County, there are three branches located in Bellevue, Monroeville, and Norwalk. There are no branches located in Erie County. The Toledo MSA includes one branch and one loan production office. The branch office was acquired in Oregon in Lucas County in 2013 as a result of the NBO acquisition. The bank moved its loan production office to Maumee in 2015. There are no branches located in Wood and Henry Counties. All of Croghan’s branches have automated teller machines (ATMs), with the exception of the main office banking center. Fourteen of the ATMs are cash dispensing-only and four are full- service machines. Two of the cash dispensing machines are stand-alone ATMs. As of December 31, 2015, Croghan’s net loans and leases represented 67.0% of total assets.